Fraud Loss Insurance Recovery

Recovery of $7.5 Million

Anthony Ostlund secures $7.5 million recovery from client’s insurers in response to a fraud loss

This was a challenging, hard-fought, and document-intensive case in which we secured a $7.5 million recovery for our client in response to adamant denials of coverage.” --Shannon Awsumb, Attorney for Client

Client Issue

Our client, a national bank and its holding company, was the victim of a criminal fraud perpetrated by a company who utilized its servicing contractor relationship with our client to steal over $26 million through a fraudulent scheme.  We assisted our client in coordinating the investigation of the fraud, worked with government investigators and bank regulators (those who committed the fraud are now in federal prison), and prepared and submitted to our client’s insurers its insurance claim for the fraud loss (the client had coverage for a portion of the loss).  After the insurers denied the claim and sued our client in federal court in Arizona seeking a declaration that there was no coverage, we defended the coverage litigation and pursued counterclaims against the insurers for breach of contract and a bad faith denial of coverage.  

The Anthony Ostlund Approach

Anthony Ostlund identified the leading forensic fraud investigation firm in Phoenix and thoroughly investigated the fraud and pursued insurance coverage on our client’s behalf, in a complex case in which discovery involved over 1.2 million pages of documents, subpoenas issued to over 40 nonparties, 16 depositions, and multiple expert reports.

Our diligence and persistence led the insurers - who vehemently argued that there was no coverage for the fraud loss claim - to pay our client $7.5 million.  This result was a significant and important recovery for our client at a critical time when it was recovering from a $26 million fraud loss while battling for two years of litigation filed by its insurers.

Result Achieved

A $7.5 million payment to our client in September 2012.  

Colonial American Casualty and Surety Company, et al. v. BNCCORP, INC. et al., No. 2:10-CV-02099-PHX-NVW (D. Ariz.)